Real GDP in the natural resources sector rose by 0.3% in the third quarter of 2020, following a record drop of 10.7% in the prior quarter. Most of the gains were concentrated in the forestry and minerals subsectors, but were partially offset by declines in the energy subsector.
According to data released by Statistics Canada on Friday, GDP levels in the energy subsector declined by 3%, largely due to a decrease of 3.9% and 6.8% in crude oil and natural gas extractions, respectively. Conversely however, increases in gold, copper, nickel, lead and zinc mining in British Columbia and Ontario caused GDP levels for metallic minerals to rise by 18%, after dropping by 16.1% in the second quarter.
Real GDP of non-metallic minerals fell by 7%, lead by a decline in potash mining. Some of the factors leading to the potash mining slump are a train derailment in British Columbia that was hauling a considerable amount of potash, as well as Covid-19 outbreaks at several mines in Saskatchewan. In the meantime, Canada’s forestry sector saw real GDP levels grow by 11.8%, reflecting a considerable rebound in primary sawmill and wood products, which rose by 34.7% amid a record year of housing investments.
Export volumes of natural resources declined by 2.5% in the third quarter, following a 12% drop in the previous quarter. The decline was lead by a 2.8% decrease in energy products, as well as a decrease of 3.8% in minerals and mining. However, coinciding with the booming construction sector that is also evident outside of Canada, forestry exports rose by 3.1% in the third quarter. In the meantime, import volumes rose by 2.4% after a 12.8% drop in the second quarter.
Information for this briefing was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.